AJIT PAI’S SHELL GAME

I’ve got bad news for everyone who is working overtime to protest Federal Communications Commission chair Ajit Pai’s campaign to eliminate net neutrality: You are being tricked. Pai is running a kind of shell game, overreaching (“go ahead and run all the paid prioritization services you want, Comcast!”) so that we will focus our energies on the hard-to-pin-down concept of net neutrality—the principle of internet access fairness that he has vowed to eliminate.

Susan Crawford is a columnist for Backchannel and a professor at Harvard Law School. She is also the author of The Responsive City and Captive Audience.

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Pai is hoping to use outrage over net neutrality to drive everyone into the mosh pit of special interests that is lobbying on Capitol Hill. There will be strident calls from every side for reworking the existing Telecommunications Act to ensure that net neutrality continues. Just watch: The incumbents will piously say, “We like net neutrality too! We just need a different statute.” That’s a trap. We have a perfectly good statute already, and the Obama-era FCC’s interpretation of that statute so as to ensure an open internet—including its labeling of these giant companies as common carriers, which was necessary in order for open internet rules to be enforceable—has already been found reasonable. On the Hill, the public will be out-lobbied at every turn by the essentially unlimited resources of Comcast, Charter, CenturyLink, Verizon, and AT&T.

The real problem is a complete absence of leadership and policy aimed at making sure that low-priced, ubiquitous, world-class fiber optic services reach every home and business. Left to their own devices, the giant US companies Pai is determined to protect have every incentive to divide markets, avoid capital investments in upgrades to fiber that reach everyone, charge as much as they can get away with, and leave out poorer and rural people. That is in fact what has happened here.

The differences between the way the unrestrained, profit-at-all-costs-driven operators run things and the way a public interest-driven operator acts are obvious. For a clear illustration, take a look at Wilson, North Carolina.

I recently traveled to Wilson, a town in the eastern part of the state that is known to most as an exit ramp on Interstate 95. I found it to be a scrappy place with a tradition of taking the long view—most notably by successfully deploying a low-priced fiber optic service. Earlier this decade, the citizens of Wilson weren’t happy with the low-capacity connections and poor customer service offered by Time Warner Cable (now Spectrum). Wilson already had a public electric utility, so it was familiar with the benefits of operating a utility in the public interest. It built its own fiber optic network, and today offers 50 Mbps service (equal uploads and downloads) for $40 a month.

Here’s just a single example of the difference between Wilson’s system and one owned by an unregulated member of the connectivity cabal: the ease with which you can access the service, particularly if you have limited funds. In Wilson, you can sign up for prepaid service (with the same 50 Mbps capacity) for $1.15 a day. It’s a highly automated customer experience: You call up customer service, say you want access—you can set up your account with as little as $10—and you’re done. No credit check, no deposit, nothing. You can switch from a post-paid $40/month service to prepaid daily service with a phone call. (Try that with Verizon, Comcast, or AT&T.) When you’re about to use up your days, you can have a text, email, or call go out to you; after that, if you haven’t refilled your account, the service automatically shuts itself off. All you have to do to turn it back on is call again or go online and refill your account.

Wilson did this to make life easier for new customers, or for customers who want to avoid signing up for a full month of service. “It removes barriers to access and puts the customer in control,” says Will Aycock, the manager of Wilson’s Greenlight fiber service. The $1.15 is the prorated, per-day amount for Wilson’s regular monthly service—$39.95 for internet access alone. No data caps. When I asked Aycock why other internet access companies don’t provide an equivalent product, he was stumped. “I have no idea,” he said.

Wilson’s prepay program isn’t the only step Wilson has taken to reach more of its citizens with fiber. Though the city’s Greenlight fiber service is already connected to about 40 percent of the units in the town, it hasn’t—like the unregulated private fiber providers in the US—decided to deny fiber to some parts of the city. If you move to a place in Wilson that doesn’t have fiber, all you have to do is call and ask for service. Greenlight will install it for you for free.

Even more dramatically, if you’re in public housing or an apartment building in Wilson, in exchange for $10 per month added to your rent check you can get 50 Mbps symmetrical fiber internet access service. Wilson does this because it is in the city’s interest to provide service to the most people it can at the most reasonable cost. And about 50 percent of public housing residents are signing up.

True, Comcast has a prepaid program and a $10 “Internet Essentials” scheme. But both are much more limited than what Wilson offers. Xfinity Prepaid is an asymmetrical and slower service: 20 Mbps down and just 3 Mbps up, below the FCC’s definition of high-speed access. You can’t sign up for a prepaid Comcast service if you have an active Comcast account: You can’t switch.

And Comcast’s Internet Essentials program, launched several years ago in order to give the FCC something to talk about when it approved the against-the-public-interest Comcast/NBCU merger, is, by percentage, much less popular than Wilson’s 50 percent. As of 2015, Comcast’s program had reached only about 17 percent of its eligible population.

Why is Comcast’s program so unpopular? Because it’s a second-rate, low-capacity service (15 Mbps down, 2 up); it isn’t available to people who have owed money to Comcast within the past year; it comes with a data cap; it isn’t available to anyone who has had a Comcast account in the last 90 days; it isn’t available to people who also want to subscribe to pay TV channels; and it requires that you re-up each year with documentation proving your eligibility. So if you’re currently a Comcast internet access subscriber, you’d have to cancel, wait 90 days (tough for families with school-age kids; tough for anyone, really), and then apply. And re-apply next year.

It’s no mystery why Comcast’s offerings are so unattractive and hard to access: It is not in Comcast’s interest to cannibalize its full-priced customer base. Remember, where Comcast provides service it is usually the only high-capacity option. According to recent estimates by Wall Street analyst Craig Moffett, Comcast faces competition from fiber in at most a third of its footprint. There is no reason for the company to provide a respectable, equivalent prepay program to which subscribers can switch at any time if they need to. There is no reason for the company to make an equivalent service available to poorer people at a lower cost. That’s completely rational from Comcast’s perspective.

In contrast, Wilson makes it easy for anyone to get fiber, whether they’re low-income or not. It’s providing the same symmetrical, high-capacity service to everyone, rich and poor. And it has every incentive to keep subscription prices as low as possible.

Finally, you might wonder why, if Wilson’s service is so successful, its neighbors in North Carolina haven’t noticed and started building similar systems of their own. The answer is that it’s illegal. Time Warner Cable (later Charter, later Spectrum) succeeded in getting the state legislature to pass legislation in 2011 aimed at never letting another city in the state follow Wilson’s lead.

What Wilson is doing is offering fiber optic, high-speed internet access in the public interest. The differences between Wilson’s utility approach—getting as many people online as possible, from every walk of life, with the highest quality service and at reasonable prices—and what most Americans experience is dramatic. (In many places in America, this kind of great service doesn’t have to be provided by the government itself; it can, instead, be provided when private companies compete to serve you over a neutral, passive dark fiber network operated in the public interest, as San Francisco plans to do.)

These comparisons neatly illustrate the difference between a system that accounts for the public interest and one that eschews regulation and leaves citizens at the mercy of quasi-monopolistic, unrestrained corporate giants. Every American should have the opportunity to get this kind of utility fiber service at competitive prices. Yes, I said utility—how can you be sentient in 2017 and not realize that internet access is as vital a utility as phone service and radio were in the last century? Recognizing this basic fact means that we’ll need to burden private basic telecommunications companies with public obligations—the way we have as a country for 100 years.

The utility, common carriage,“Title II” label, in a nutshell, is the legal categorization that all of Ajit Pai’s net-neutrality handwaving is aimed at destroying. He’s being outrageous so that we’ll all meet in the middle on Capitol Hill. Stay focused, internet access fans. Don’t be driven into a frenzy by net neutrality. It’s a diversion. It is the FCC’s continuing legal authority, and our absence of informed leadership, that is the real issue. The statute is just fine.

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